Minden firm sues Amazon.com
March 25, 2016
Minden manufacturer GoPed is suing Amazon.com for more than $1.6 million in federal court alleging the online distributor assessed late charges equal to the amount the scooters were worth.
Genoa attorney William D. McCann filed the suit in Reno on Wednesday seeking triple damages under the federal Racketeer Influenced and Corrupt Organizations Act and legal fees.
According to the lawsuit, Amazon and Patmont Motor Werks, which is GoPed's predecessor, entered into a distribution contract in 2004.
In 2012, Patmont sought Chapter 11 protection in federal bankruptcy court and the judge issued an automatic stay.
Patmont assets were sold to GoPed Limited on March 13, 2015.
The lawsuit asserts that over two years, Amazon started imposing "chargebacks" on the scooters that arrived late to customers that sometimes "amounted to the full value of the scooters shipped by (Patmont)."
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According to the lawsuit, Patmont delivered 17 scooters worth $21,850.95 on July 3, 2013.
"Amazon shipped these scooters to their customers and retained the full amount of their value," the lawsuit claims. "In every other case of purportedly late delivered scooters, Amazon charged 'chargebacks' are far in excess of a fair or reasonable penalty for late delivery."
The lawsuit claims that those chargebacks totaled $216,568.43, or nearly 17 percent of the Minden company's $1.79 million gross sales.
According to the contract with Amazon, vendors must seek arbitration, which the company did in October 2015.
The lawsuit claims that the Minden firm couldn't purchase parts for other orders or create inventory, which negatively affected their business.
The original GoPed was invented in 1985.
A writ was filed in Douglas County in 2012 that led to $27,000 being seized by the sheriff and forcing the company into Chapter 11 on Aug. 27, 2012.
The filing cost the company $3 million in lost revenue because it couldn't fill orders.